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Dealing With Adjustors

This is a chapter from 2015’s Attorney Deskbook produced by the Oregon Trial Lawyers:

CHAPTER 10

INITIAL CONTACT WITH ADJUSTORS

By: Elizabeth E. Welch

INTRODUCTION

When you receive a call from an injured potential client, it’s important to start framing your case right away. The way to do that is to begin immediately to control the flow of the information, requiring all information about the client and their injury to come from the attorney only. There are many considerations to be made and issue spotting opportunities to be had in the initial contacts to the at-fault driver’s company and your client’s own insurance company. Your client will benefit from your organized handling of information at the beginning and throughout the case. With a little effort and savvy, an attorney representing a crash victim can really drive the case into a great resolution.

CONTROLLING THE FLOW OF INFORMATION

Most people involved in an auto collision will not call an attorney immediately. In a perfect world the attorney could start to craft and protect the case from the get-go. Most of the time, however, the client has already attempted to handle their own case and more likely than not, caused damage to the value. Regardless, establishing a good foundation with the adjustors is very important to the overall value of the case.

2.1 Why Come to an Attorney?

If the client comes in for representation after trying his/her hand at handling his or her own claim, likely they came to an attorney because the adjustor is rude, uncooperative or the offer to settle was terrible. Rarely does the client a year or more post collision agree to hire an attorney because of family or friend pressure. This is a good time to tell the client that insurance companies are not their friends.

2.2 Clients Hurt Their Own Cases

If the client has communicated with the adjustors this whole time, the value of the case is probably lower, especially if settlement negotiations have taken place. Why? Because the attorney has not had the opportunity to protect the outflow of information regarding the medical treatment and other damages. The attorney has not had the opportunity to track the PIP payments to be sure everything is paid. The attorney has not been around to advise about PIP IMEs, statements made to adverse carriers, overtreatment by medical providers, and excessive billing practices… the list goes on. The client will often be very sorry at this point. As an attorney, after a year of non-representation, you do the best you can with the hand (or case) you’ve been dealt.

SETTING UP THE CLAIM

3.1 You Make the Call

When the client was so recent that the client has not received anything from either insurer, what do you do after you have done an intake? Most new clients have at least a claim number. Call the insurance companies and give them the claim number. They will give you the information on the adjustor, including any email or fax number. If the client has not called in the collision yet, do make the call for the client. This is because the temptation by the client to answer questions by the adjustor is too strong. Keep in mind after the client has signed your fee agreement the client is a represented party, and the insurance company is not likely to talk to the client directly.

3.2 Contacting the Insurance Companies

When the client has already started a claim, the first thing to do is to write letters to all involved insurance companies. Most major insurance companies have a central processing fax number and processing location. The letters you write can be faxed directly to those central processing locations and an adjustor will contact you. Many times an adjustor has already been assigned because the client has been working with their own PIP provider and the liability adjustor.

Many, but not all, insurance companies will switch adjustors after an attorney shows up because the client is now “attorney-repped.” The practice of switching adjustors seems suspect, but nonetheless, you as the attorney will now be interacting with a person hopefully familiar with Oregon law.

3.3 Take Note of the Insurance Company Names and Adjustors

You should have noted at the initial discussion with the client what insurance companies you are dealing with: both the bad driver’s and the client’s PIP and UM/UIM carrier. You may have experienced that company’s claims handling before, which allows you to start working up the case in the correct way that tailors the issues to what you know that insurance company will need to evaluate the case. The attorney may be familiar with the specific adjustors and some decisions can be made based on that knowledge. A previously established good working relationship with the particular assigned adjustor pre-exists your current case. If the injuries are catastrophic, the insurer often puts a well-seasoned adjustor on the case, or one is quickly switched to the case once the extent of the injuries is known.

If you know the insurer often puts adjustors with little experience or authority on the first line of defense, and if that adjustor does not change once the client becomes “attorney-repped,” consider filing the case rather than sending a demand. This will likely move the case to another adjustor attempting to settle the case with the goal of avoiding litigation, or will move the case to an attorney. Defense attorneys in Oregon often know the value of a case and whether the case is easily defendable. They also know Oregon law.

Many times the adjustor stays the same, or the adjustor is not local. Take note of this. Internal insurance practices change and when you notice a trend, it’s not hurtful to ask on the OTLA listserv if others have noticed a switch or new practice by an insurer: we all benefit from this knowledge. If the adjustor stays the same, it may be, for example, that the insurer is trying to give all adjustors litigation experience.

If the adjustor is not local, this can be advantageous. For example, if you plan to bring a case under ORS 20.080 or ORS 742.061, an out-of-state adjustor may not understand the time limits and exact requirements to perfect your right to attorney fees. Moreover, the out of state adjustor may be more accustomed to higher values because the jury verdicts are higher in their areas. If you are not familiar with a particular insurer or adjustor, ask around.

INITIAL LETTER TO THE BODILY INJURY INSURER

There’s not a lot to say initially. Along with a definitive statement regarding your representation of the client, request any statements made, any medical records received, and any information regarding witnesses. You can ask for information on the policy limits, but are very unlikely to receive this information until litigation ensues.

4.1 PIP Election

Your initial representation letter to the liability adjustor is a good time to nail down your PIP election. A line which states “my client will settle this case for $500,000” which is then simultaneously sent to PIP (to be discussed below) complies with the requirements of ORS 742.536 to start the clock on the PIP insurer’s election of reimbursement methods under ORS 742.534, ORS 742.536, and ORS 742.538.

Practice Tip: The adverse adjustor will often call or write you after receipt and protest regarding a lack of evidence to evaluate the claim. A simple statement to the adjustor that your mini “demand” was only to comply with the PIP election statute requirement suffices here. The adjustor is not likely to place this case into the “attorney has unrealistic expectations” file so long as you explain the necessity to give a solid number in your “notice of claim” pursuant to the PIP election statutes.

4.2 Statements to the At-Fault Insurer

The at-fault adjustor will ask to take a statement, and will ask about your client’s specific injuries. The at-fault insurer has no right to a statement, recorded or otherwise, from your client and it will bring no benefit. Keep in mind that the attorney for the injured client has to be the controller of information. It seems a natural human desire to make others feel comfortable, and along with that is a downplaying of injuries and pain. Therefore, the client is not the best person to relate their injuries to the adjustor, the attorney is. Also, many times clients are focused on tangential information, or issues for which we are not representing them [1]. All are reasons to avoid the statement to the bodily injury carrier: too many potential issues could arise that complicate the case later down the line.

As for specific injuries, ask the client what has already been relayed to the at-fault adjustor at the beginning. If nothing has been conveyed, and the attorney is receiving the case right after the collision, much can be done to relay general injuries. Some attorneys like to give a complete exhaustive list of injuries; others like to give general injuries. The risk to listing exhaustive injuries is the late-blooming additional injury or injured body part, which does not become apparent until after other injuries have resolved. Some injuries and damages are not always apparent from the beginning of the case, including the client going through conservative treatment before needing an MRI or surgery. Be sure to not foreclose the possibility of bringing those claims into the client’s damages at a future time. Err on the side of a general or vague recitation of injuries.

4.3 Witnesses and Policy Limits

In the representation letter, the attorney can ask for information regarding witnesses and policy limits, but most adjustors will not give the information. The identity of witnesses is often objected to as work product. Similarly, most adjustors balk at the notion of giving the amount of the policy limits without permission from their insureds.

Practice Tip: At times a good guess can be made regarding the policy limits of the at-fault driver. One way is to make a simultaneous claim for UIM benefits. Ask your client to supply you with their declarations page from their auto policy, or have them call their agent and have it faxed to you. You will then know both the UM/UIM limits and the PIP limits. Faced with a possible UIM claim, you client’s insurer will call the bodily injury company for the BI limits, and then can often can tell you there is no possibility for a UIM claim because of Oregon’s laws allowing for UM’s offsets for benefits already received. From that you know the at-fault driver has the same policy limits as your client, or higher. (Mid-Century Ins. Co. v. Perkins,345 Or 373, 195 P3d 59 (2008). ORS 742.502.

Other times the adjustor will offer the statement, often on the phone and off the cuff, that there is “plenty of insurance.” Looking at the kind of vehicle and the address of the at-fault driver may offer you clues as well, especially if you are familiar with the neighborhood and demographics of the parties involved. Commercial vehicles will have at least a million dollars or more of limits per federal trucking code.

4.4 Why Knowing the At-Fault Driver’s Policy Limits is Important

Knowing the amount of the limits is important from the beginning because you can begin to craft how the case will proceed, and you can better advise your client as to what to expect. A well-prepared client is a happy client. In general, the more money in insurance the harder the fight. There is no motivation from the BI carrier to be concerned about ultimately being sued by their own insured for bad faith, as is the concern with the at-fault driver has minimal policy limits or less insurance to cover the injured person’s damages. Lower limits, even with lesser injuries, put you in a good position to exclude PIP reimbursement per Farmers v. American Fire, 117 Or App 247 (1992) and therefore your client receives every dollar in the at-fault driver’s policy. This is because adverse is considering PIP reimbursement at the same time as what they are willing to give your client for damages. With American Fire, when PIP has elected intercompany arbitration under ORS 742.534 or has already begun arbitration proceedings, the attorney can convince the BI carrier to assess the case based on whether a jury will award damages over the minimal policy limits. The BI adjustor then looks at the non-economic damages, non-medical economic damages (e.g. wage loss) and the PIP total. Seeing a possibility of all of those damages going over the limits of the defendant’s policy will often inspire a policy limits offer in a smaller case when the PIP amount is somewhat high and the policy limits of the adverse driver are low.[2]

4.5 Medical Authorizations

Always withdraw medical authorizations for the at-fault insurer. If the client has already signed any authorizations for their medical records or wage loss information, rescind the authorizations immediately in your initial correspondence to the adjustor. Again, you want to be the conduit and the main source of information to the insurer. Find out if the insurer has already received the records from the individual providers. If that’s the case, you will have to order those same records and find out what the insurer already knows.

4.6 Give Monthly Updates to the At-Fault Insurer

Give monthly updates to the at-fault adjustor. Ask your client in an email 1) what still hurts? 2) Where are you seeking treatment? 3) What are not able to do right now? 4) How much work have you missed (if any?) and 5) what is your doctor saying to you about how long you will need to treat? Keep a list or tickle your file with the last time you asked your client these questions and the last time you sent an update to the adjustor.

Without your anticipatory updates to the adjustor, the adjustor will call you for updates. Adjustors are looking for general information. Often if you haven’t checked in with your client, you are not going to have the correct or recent information regarding your client’s injuries and treatment. You also will always be caught unaware, having not spent time reviewing the file before the adjustor calls. By initiating this contact yourself, you are in control of the information; the information is accurate and contains more information than simply body parts and treatment schedules (e.g. relating that your client is still unable to sleep well; has to have help driving themselves around; has missed most of the month from work, or had to hire a landscapers).

The information going out to the adjustors from your office will often be, while absolutely truthful, direr than the client will relate it to be. ORS 31.710 shows the list of economic and non-economic damages that can be claimed in the complaint. Keep a copy of that statute close and make sure your updates are covering those damages. Make a list of the difficulties with daily life your client is having. By being the sole source of information regarding the case to the adverse insurer, the case is kept on task and focused.

At the end of the monthly status letter to the at-fault adjustor, ask the adjustor to adjust their reserves where appropriate. Reserves are the insurer’s budgeted amount for the claim, or what the adjustor thinks the claim will be worth. Regular information regarding your client’s injuries allow for the adjustor to possibly increase the value of the case, which makes for less surprise and fewer hassles when you near settlement or decide to litigate.

4.7 Convey Information About PIP

Ask for frequent PIP ledgers as well. When you know what has been charged, and where your client is treating, send a list to the at-fault adjustor. It’s possible the at-fault adjustor has the information from PIP already but not always. Always copy your clients on these communications. It shows you are working on their case and they feel comfortable knowing the information going out is accurate.

4.8 When the At-Fault Driver and the Injured Person Have the Same Insurance Company

In the case of a UIM case or when the at-fault driver and the injured person have the same insurance company, tell both insurers they are not allowed to share the PIP file. Health Insurance Portability and Accountability Act of 1996 (HIPAA), 42 USC §201 et seq. contains rules regarding the privacy of “protected health information.” While UIM or UM is not the tat-fault driver (we would certainly understand restricting PIP from sending protected health information to the at-fault driver or their insurer), when triggered, UIM and UM are insurance policies to potentially make the injured person whole. To decide how much a UM or UIM policy will pay out, however, the injured person’s own insurance company sits in judgment as though they are the at-fault insurer to decide via litigation or with an adjustor pre-filing to assess damages. This makes UIM/UM’s interests adverse to their own insured’s, and invariably UIM and UM are trying to pay less than full value. PIP should not share with UIM/UM for that reason.

INITIAL LETTERS TO PERSONAL INJURY PROTECTION (PIP) INSURER

The initial letter to PIP contains much more information and directives for the PIP provider. In addition to the attorney’s information, the claim number and the date of the collision, the letter to PIP includes an admonition to treat the client fairly; has a demand to elect reimbursement under ORS 742.534, 742.536 and 742.538; and includes information regarding not sharing the file.

5.1 Demands for Election of Reimbursement Method

Under ORS 742.534, 742.536 and 742.538 PIP is entitled to reimbursement of the amounts it paid for its insured if the plaintiff is successful recouping any damages from the at-fault driver. Send the representation letter with the money demand to the at-fault carrier (the demand/representation letter can go by fax or by email), and then send a copy via certified mail to the PIP carrier. ORS 742.536 states the insurer has 30 days to elect a lien. Most PIP carriers in Oregon choose intercompany arbitration. In that case, write the PIP carrier after 30 days and state:

Thank you for your letter dated July 20, 2013, in which you indicate you are pursuing intercompany arbitration pursuant to ORS 742.534.

I regard your choice of intercompany arbitration as a waiver of any right to recoup any money by lien or other subrogation method through my client’s case against BAD DRIVER’s INSURANCE, including any personal injury settlement or award that my client may recover from the BAD DRIVER’s INSURANCE, the liability carrier. In reliance on your position, I will refrain from taking any action to protect or collect your PIP reimbursement.

Many times PIP does not respond. Send a letter when PIP has not responded stating you are assuming intercompany arbitration. In the case of a lien, make sure the lien is proper according to ORS 742.536. It does not hurt to let the at-fault carrier know you are now recouping the PIP lien for the PIP carrier, and therefore any offer will need to be made inclusive of the PIP lien. This goes to the at-fault insurer’s reserves.

5.2 Proof of Claim for UM/UIM Purposes

Don’t use your representation letter to PIP as your Proof of Claim for UM/UIM purposes. Take the time to write a separate letter to UIM. ORS 742.504(5)(a) states:

As soon as practicable, the insured or other person making claim shall give to the insurer written proof of claim, under oath if required, including full particulars of the nature and extent of the injuries, treatment and other details entering into the determination of the amount payable hereunder. Proof of claim shall be made upon forms furnished by the insurer unless the insurer fails to furnish the forms within 15 days after receiving notice of claim. (Emphasis added).

Without this proof of loss, the courts have held that the timing for attorney fees under ORS 742.061 is not triggered: “Relying on Dockins v. State Farm Ins. Co., 329 Or. 20, 29, 985 P.2d 796 (1999), and Scott v. State Farm Mutual Auto. Ins., 345 Or. 146, 155, 190 P.3d 372 (2008), we held in Hall that, when the record shows that an insurer has submissions from the insured sufficient to allow the insurer an adequate opportunity to investigate its UIM obligation, the insurer has proof of loss.” Zimmerman v. Allstate Property Ins., 267 P3d 203, 246 Or App 680 (2011).

5.3 Client Statements to PIP

Unlike at-fault insurers, PIP is entitled to take a statement from your client who is also their insured. Most PIP carriers have in their policy a requirement of “cooperation.” Therefore the PIP carrier can and will ask for a statement, but with the understanding that the attorney will be present. These statements are often done on the phone with the attorney patched in. It’s a good time to hear your client testify- as to their injuries and the collision and their damages. Do prepare your client for this PIP interview as you would for your client’s depositions and other testimony.

Despite the obligation to fairly handle your client’s claim, PIP naturally wants to minimize paying benefits. The PIP interview can be helpful to PIP pin the client’s symptoms on pre-existing conditions and not resulting from the collision. Be careful to advise your client of the focus of questions to avoid giving PIP information that would be used against your client.

5.4 Fair Dealing

Many attorneys also include a warning to PIP in their representation letters regarding the client’s expectation for fair dealing, and in full accord with ORS 746.230, which sets forth the standards for the fair handling of all insurance claims, not just PIP claims, in Oregon.

5.5 Acquiring the PIP File

Your client may be done treating and it’s time to gather up the medical evidence. Many medical records and bills can be retrieved from the PIP file, and you can request it in the opening letter. You should also request a copy of the PIP ledger. The client is entitled to a copy of their PIP file. Some companies charge a fee for a copy of the PIP file. Request the file be sent to the client to avoid those costs. For the most part most PIP carriers are cooperative in sending the PIP file, either in paper or on a disc.

5.6 Unpaid Bills Submitted to PIP

Ask PIP for copies of bills which have been submitted and not paid. Ask for the Explanation of Benefits that go with these bills. Often if a bill is unpaid, it’s in the best interest of the client to figure out why it’s not being paid. See if there is anything your office can do to assist. PIP will often not pay a bill because it has not received a chart note to go with the bill. Kaiser providers and AMR ambulance are examples of providers who often do not provide enough documentation for their bills. If you have the medical record go ahead and send it to PIP and try to get the bills paid. It is in your client’s best interest to have their medical bills paid quickly and without hassle.

5.7 Declaration Page

You can also request a copy of the declarations page showing the amount of PIP coverage (Oregon law requires PIP coverage of at least $15,000). ORS 742.524. Some clients have more coverage than that. This is important information for you to have, because knowing if your client is likely to exceed their coverage is an important subject to discuss with your client. Find out if your client has health insurance. If they only have PIP and do not have other coverage (i.e., other PIP policies they are covered under, or health insurance) they need to manage their benefits carefully, and you need to be on top of their treatment and how much money is left in PIP. When PIP is the only source of money to pay medical bills and allows your client to receive treatment, it’s very important to know if your client is getting to the end of the money in PIP, getting to the one year statute of limitations for PIP coverage. ORS 742.524.

5.8 Statements and Investigative Reports

You can also ask for any statements or investigative reports obtained from the client, the adverse driver, or any witnesses. Often PIP only has your client’s PIP statement to them, and they will send it to you, often just the recording without transcription.VI. CONCLUSION

It’s possible to have a pleasant experience with an adjustor. One way to have more pleasurable experience is to limit contact and chitchat, but that requires proactive work by the attorney. However, this contact ensures that, when the case is ready for resolution, the adjustor is most prepared for the demand. The PIP adjustor has paid every bill it is required to pay, and there are no lingering liens or repayment expectations to creep up and hurt your case.

[1] For example, that they did not receive full compensation for their vehicle damage because their personal loan was underwater or that they had to start using their health insurance that has a high deductible, or the defendant was a jerk at the scene. These may be interesting but not germane to their ultimate damages for a bodily injury case.

[2] Also, not knowing the at-fault driver’s policy limits can put you in a position of potentially settling for “limits” and then having a battle as to what the “limits” are. Emerson v. Kasano, 260 Or App 577 (2014). Plaintiff and Defendant agreed to settle for “policy limits” in a motor vehicle crash case. Defense offered “policy limits” believing the policy limits were for $50,000 but in fact the limits were for $100,000. The trial court reformed the agreement to $100,000; the Court of Appeals sent it back to the trial court, for lack of an antecedent agreement.